McKinsey recently extolled the virtues of their alumni network, announcing that approximately 450 ex-McKinsey consultants are CEOs of companies with more than $1 billion in annual revenues. This is an impressive statistic underscoring how companies should manage staff departures. Undoubtedly McKinsey also counts on 450 apostles and prospective customers, among the more than 30,000 in their alumni network. This move is also a marketing masterstroke, not only for prospective job applicants (the most important input in McKinsey's value chain), but for their customers who continue to herald the firm as an exceptional crucible for talent and breakthrough insights. Why more firms do not follow this approach is puzzling.
Instead, for the average company and, most importantly, for the departing employees, parting is such sweet sorrow and opportunities for long term value and brand-enhancement are lost. Staff turnover or in HR parlance "churn" is a sign of a healthy economy. When people feel sufficiently confident in their prospects to leave a sure thing for a new job in an established company or for the real risk-takers, to start their own firm, companies should see this as an opportunity rather than a threat - after all, why would a company want someone in their firm if they are ready to move on? Much like when students graduate, the greatest testament to the institution is their accomplishments after graduation. Academic institutions go to great lengths to ensure their alumni networks are tracked and deeply engaged. Many spend millions on elaborate databases and worldwide alumni clubs building lifelong connections. Like, McKinsey, leading graduate schools put a lot of effort in job placement for their alumni. Few companies do the same, where management consulting and human capital intensive firms are leaders in this domain.
While not all staff departures are voluntary or amicable in nature, all offer an opportunity for companies to build goodwill, lifelong engagement and a worldwide pool of apostles. Much like marketers want to learn from unhappy customers, more firms should look at exit interviews not as sustained recrimination, but as a free opportunity to learn about ways to improve. The ways to do this are fairly clear, borrowing a page from McKinsey and leading academic institutions who direct relatively modest resources on keeping tabs on their alumni. Sadly acrimony reigns and the average staff departure is overshadowed by the negative motivators for seeking greener pastures, such as under-compensation, slow career advancement, lack of organizational alignment and fit, among other factors. Many of the tools companies use to restrain former employees contribute to this acrimony, while providing little or no real safety. Non-compete and non-solicitation agreements (considered a human rights violation in many markets), confidentiality and other forms of restraint are creating a placebo effect for companies that they are protected and legions of angry ex-employees bent on some form of payback. Non-compete agreements are not enforceable in California, arguably one of the world's most vibrant economies.
The use of these tools is truly a pyrrhic victory for both the firms and ex-employees. When ex-employees bash their old firms, they are tearing a part of themselves down - not to mention how undignified it is to sully reputations. After all, the mudslinger's hands are also dirty. The market and Adam Smith's invisible hand does a far better job of correcting errant companies than any amount of gripes and angry job boards or posts. So on both sides, the post-employment high road is the only path where old value and goodwill can be preserved and new value can be discovered. No matter how embittered my company departures have been (and I've seen it all), I have built my career upon the foundations of my prior firms and never at their expense. After all, they are now an indelible part of my experience (for better or worse), professional brand and who I am as a leader.
Early in my management career while in London, I was tasked with quickly turning a company around and selling it back to the distributor whose products we represented. While this was an unforgiving task that did not spare many employees, it was my priority to ensure that each and every one of them not only landed on their feet, but that their ongoing work was tracked. The alumni of this potentially bitter experience are not only lifelong friends, their accomplishments since have seen them to leadership positions of their own right at firms much larger than the one we salvaged. In short, the greatest testament as a leader is not your own exploits, but rather those of people you are leading or have led - whether they remain by your side or in your firm. This is certainly a difficult and magnanimous task, as many departures are indeed sorrowful. Nonetheless, the onus and balance of power is on companies to make the most of staff turnover. McKinsey and leading academic institutions offer clear examples of best practices. Company culture, selective hiring practices and an unwavering devotion to fair treatment are better protections against post-employment malfeasance than all the restraints in the world.